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Note: Intermediate answers are shown below as rounded, but the full ansv The value of the firm is the value of the debt plus the value of the equity. We debt-equity ratio with no taxes is: V=E+D$48,400,000=E+$19,100,000E=$29,300,000Debt-equityratio=$19,100,000/$29,300,000Debt-equityratio=.65 With taxes, the value of the firm is: VL=VU+TCDVL=$48,400,000+.22($19,100,000)VL=$52,602,000 With taxes, the equity becomes: V=E+D$52,602,000=E+$19,100,000E=$33,502,000 So, the debt-equity ratio is: Debt-equity ratio =$19,100,000/$33,502,000 Debt-equity ratio =.57 Note: Intermediate answers are shown below as rounded, but the full ansv The value of the firm is the value of the debt plus the value of the equity. We debt-equity ratio with no taxes is: V=E+D$48,400,000=E+$19,100,000E=$29,300,000Debt-equityratio=$19,100,000/$29,300,000Debt-equityratio=.65 With taxes, the value of the firm is: VL=VU+TCDVL=$48,400,000+.22($19,100,000)VL=$52,602,000 With taxes, the equity becomes: V=E+D$52,602,000=E+$19,100,000E=$33,502,000 So, the debt-equity ratio is: Debt-equity ratio =$19,100,000/$33,502,000 Debt-equity ratio =.57